NCSOFT delays key game launches, darkening H2 outlook

NCSOFT Corp., South Korea’s leading games developer, postponed the releases of key games that could attract new users, clouding its business outlook for the rest of this year.

NCSOFT said on Friday it had delayed the release of its masterpiece title Throne and Liberty (TL), originally scheduled to hit the market this year, to the first half of 2023.

The gaming giant also decided to postpone until next year the launch of its popular massively multiplayer online role-playing game (MMORPG) Lineage W, the company’s first game to target overseas users, in North America and Europe. It had initially planned a fourth quarter release.

“We are discussing when the best timing is and who the best partner is,” Lee Jang-wook, NCSOFT’s senior managing director for investor relations, said in reference to TL during an earnings call. “We conducted mass-scale testing this week, in which some 3,000 employees took part, in preparation for a release in the first half of next year.”

NCSOFT shares tumbled 4.94% on the local bourse, far underperforming a 0.16% gain in the main Kospi, as delays of game releases dampened hopes for better earnings. Its competitors aim to beef up earnings in the second half by releasing new games that could attract more users.

NCSOFT also unveiled plans to launch new titles such as a battle royale game Project R, but still failed to ease investors’ concerns.

LINEAGE W LOSES STEAM

The gaming behemoth reported lackluster quarterly earnings as its blockbuster hit title Lineage W lost growth momentum.

NCSOFT said its operating profit rose 9% to 123 billion won ($94.3 million) in the second quarter over the same period in 2022 on a consolidated basis, with sales up 17% to 629.3 billion won. Both profit and sales missed average forecasts of 141.9 billion won and 638.4 billion won, respectively.

Revenue from Lineage W., launched last November, fell 40% to 223.5 billion won from 373.2 billion won in the first quarter when the company logged a stronger-than-expected profit.

On the other hand, operating expenses increased 19% on-year to 506.3 billion won, while labor and marketing costs grew by 11% and 8%, respectively, to 206.6 billion won and 59.9 billion won.

NCSOFT aims to boost earnings in the second half by spiffing up existing games rather than launching new titles.

MMORPGs often attract users who stopped playing games by adding fresh content such as new characters.

NCSOFT’s Lee said data on Lineage W such as the number of daily users and traffic stayed strong, adding: “we will maintain performance in the second half by updating contents.”

Write to Seung-Woo Lee at leeswoo@hankyung.com
Jongwoo Cheon edited this article.